5. A firm has the capacity to produce 1,000,000 units of product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000. Annual fixed costs are P250,000 and the variable cost per unit is PO.70. What is the profit or loss if the firm can increase its sales to 80% of full capacity assuming that its selling price and variable costs per unit remains constant.
5. A firm has the capacity to produce 1,000,000 units of product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000. Annual fixed costs are P250,000 and the variable cost per unit is PO.70. What is the profit or loss if the firm can increase its sales to 80% of full capacity assuming that its selling price and variable costs per unit remains constant.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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